Broadcom (AVGO) Unveils World's First Wi-Fi Ecosystem Solutions
Broadcom AVGO recently announced that it is launching the world’s first complete end-to-end chipset solutions for the Wi-Fi 7 Ecosystem. The new solution includes Wi-Fi 7 ecosystem spanning Wi-Fi routers, residential gateways, enterprise access points, and client devices.
Wi-Fi 7 is the most powerful Wi-Fi standard, which doubles the Wi-Fi channel bandwidth of Wi-Fi 6 and 6E with the introduction of 320 MHz channels. Wi-Fi 7 will greatly improve how varied users communicate, work and play.
Enterprise and residential networks will enjoy advanced multi-link operation capabilities allowing devices to compile different channels and rapidly switch between them in a high density and congested network. It will benefit the networking technology for industrial and IoT applications.
The Broadcom chips are currently being distributed by Broadcom as samples to early access partners and customers in the enterprise, service provider, retail and mobile segments.
Broadcom Inc. Price and Consensus
Broadcom Inc. price-consensus-chart | Broadcom Inc. Quote
Broadcom Top Line Gains From Wi-Fi 7 Growth
Broadcom is currently a global leader in Wi-Fi solutions with its full suite of Wi-Fi solutions. The company has been benefiting from a diverse customer base, which resulted in the distribution of one billion Wi-Fi 6/6E chips over the past three years, directly contributing to revenue growth.
Demand for high-performance Wi-Fi rapidly increased amid the pandemic. With people forced to work from home and the rise in immersive gaming and streaming, strong Wi-Fi solutions witnessed increased demand.
This has helped Broadcom in driving the top line in the fourth quarter of fiscal 2021, backed by the broadband end market. Revenues were up 29% year over year to $872 million and contributed 16% of Semiconductor Solution revenues. Continued strong demand for next-generation PON with Wi-Fi 6 and 6C access gateways drove results. Revenues from the wireless vertical increased 21% year over year to $1.8 billion and contributed 32% of Semiconductor Solution revenues.
As a result, Broadcom’s, which currently carries a Zacks Rank #3 (Hold), shares have fallen 12.1% year to date compared with the Zacks Electronics - Semiconductors and the Zacks Computer and Technology Sector’s declines of 23% and 17.6% respectively.
The semiconductor industry and computer and technology sector as a whole are reeling from the global geopolitical tension stemming from the ongoing Russia-Ukraine war. This has resulted in rising inflation, thus increasing the cost of production and aggravating the global supply chain issue.
The rise of AR and the metaverse amid these uncertainties is a silver lining as Wi-Fi 7 is an utmost necessity for AR and metaverse. This, in turn, is expected to benefit Broadcom, which is poised to gain market share in the industry with the world’s first complete end-to-end chipset solutions for the Wi-Fi 7 ecosystem.
Stocks to Consider
While Broadcom is a stock worth retaining, here are some better-ranked stocks in the broader Computer and Technology sector worth considering.
NVIDIA NVDA carries a Zacks Rank #1 (Strong Buy).
Nvidia shares have slumped 26.9% in the year-to-date period, compared with the Zacks Semiconductor – General industry’s decline of 20.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks ANET sports a Zacks Rank #1.
Arista shares have slumped 11.5% in the year-to-date period, compared with the Zacks Communication - Components industry’s decline of 9.7%.
Bel Fuse BELFB flaunts a Zacks Rank #2 (Buy).
Bel Fuse shares have returned 24.1% in the year-to-date period, against the Zacks Electronics - Miscellaneous Products industry’s decline of 30.3%.
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